The Selected Funds

Investment Strategy

For 60 years and three generations of portfolio managers, Davis has utilized a consistent approach of seeking durable, well-managed businesses that can be purchased at value prices and held for the long term.

The Fund's holdings can be described as follows:

Companies recognizable as strong global leaders represent the largest percentage of the portfolio.

Companies that are underfollowed or overlooked but have strong business fundamentals represent a smaller percentage of the portfolio. These companies are often quiet compounding machines for the portfolio.

Companies that are controversial and face negative headlines represent yet another smaller percentage of the portfolio. It is hoped that these companies may add significantly to the portfolio's performance since their stock prices are frequently discounted from their intrinsic values.*

* While we research companies subject to such contingencies, we cannot be correct every time, and a company's stock may never recover.

Investment Results

To be one of the very best over the long term does not mean you have to be number one every year.

Consider Selected American Shares. As the chart illustrates, from 5/1/93 to 12/31/09, Selected American Shares delivered an average annualized return of 9.5%—outperforming the S&P 500® Index by an average of 1.7% per year.*

A hypothetical $10,000 investment in Selected American Shares in 1993* has compounded to $45,350, while a hypothetical investment in the S&P 500® Index over that same time period has compounded into only $34,928.

We have been able to create reliable long-term investment results, despite the inevitable and expected fact that other investments may have outperformed the Fund in any particular year.*

At Selected, we believe that boring can be beautiful.

Annualized Total Returns as of December 31, 2009	1 Year	5 Years	10 Years	15 Years	Inception (5/1/93)**
Selected American Shares Class S	31.64%	1.12%	2.24%	10.26%	9.49%
S&P 500® Index	26.46%	0.42%	-0.95%	8.04%	7.80%

The performance presented represents past performance and is not a guarantee of future results. Total return assumes reinvestment of dividends and capital gain distributions. Investment return and principal value will vary so that, when redeemed, an investor's shares may be worth more or less than their original cost. The total annual operating expense ratio for Selected American Shares Class S as of the most recent prospectus was 0.92%. The total annual operating expense ratio may vary in future years. Returns and expenses for other classes of shares will vary. Current performance may be higher or lower than the performance data quoted. For most recent month-end performance, click here or call Selected Funds Shareholder Services at 1-800-243-1575.

* All returns are from 5/1/93 through 12/31/09. Past performance is not a guarantee of future results. Equity markets are volatile and an investor may lose money.
** Inception date used is the date Davis Advisors took over management of this Fund, 5/1/93.

Sixty Years of Investment Experience

Sixty years and three generations of experience investing in the stock market has taught us that uncertainty is the rule, not the exception.

In fact, during the past six decades, the Davis family has navigated many different market and economic environments, including 11 recessions, 13 bear markets, including the '73-'74 bear market and the Crash of 1987, the S&L crisis, the NASDAQ collapse, 9/11, interest rates ranging between 2.1%-15.8%, oil prices ranging between $10.25-$133.60 per barrel, inflation ranging between 0%-14.76% and three major military conflicts.

Despite these inevitable periods of uncertainty and crises, stocks have rewarded patient long-term investors. A manager with experience navigating decades of ever-changing market conditions may provide investors with the conviction necessary to adhere to their investment plan and benefit from the long-term compounding power of equities.

Fund Attributes

Our firm's consistent application of the patient, rigorous, research-intensive Davis investment discipline, combined with our strong belief in the principles of shareholder stewardship, has resulted in a number of unique attributes:

Investment Results
Selected American Shares outperformed the S&P 500® Index in 11 of 13 rolling five year time periods since Davis Advisors began managing the Fund.3

Substantial Co-investment
The Davis family, Davis Advisors, employees and directors have over $2 billion of their own money invested side by side with fellow shareholders in the various mutual funds our firm manages. This creates one of the greatest degrees of shareholder alignment in the industry. 4

A Culture of Shareholder Stewardship
At Davis, we put our clients' goals first. Morningstar has recognized this commitment by awarding the Fund its highest overall Stewardship Grade of "A", as well as an "A" in all five components of the score. Selected American is one of only three funds with this distinction (among the 1022 funds Morningstar grades). 4

Lower Than Average Expense Ratio 5:
Selected American Shares S, 0.92%; Lipper Category Average, 1.26%

Lower Than Average Turnover Rate 6:
Selected American Shares S, 18%; Lipper Category Average, 90%.

Over the past five years, Selected American Shares turnover has ranged from 3% to 18%.

1 Selected American Shares searches for companies that have achieved a dominant or growing market share and are led by first class management. There is no guarantee that the Fund's investments in these companies will be profitable.
2 Selected Selected American Shares’ investment objective is capital growth and income. In the current market environment, we expect that income will be low. There can be no assurance that the Fund will achieve its objective.
3 Class S shares as of 12/31/09. Davis began managing the fund on 5/1/93. Past performance is not a guarantee of future results. See endnotes for a description of our rolling 5 year returns and a definition of the S&P 500® Index.
4 As of December 31, 2009.
5 Fund expense ratio is as of most recent prospectus. Lipper Category Average is as of most recent quarter end.
6 Fund turnover is as of most recent audited financial statement. Lipper Category Average is as of most recent quarter end. Figures reported are net of reimbursements and may vary in future periods. Peer/category data is compiled using Lipper. As of December 31, 2009, Selected American Shares had been categorized by Lipper as Large Cap Core.

This material must be accompanied or preceded by a current Selected Funds Prospectus. Carefully consider the fund's investment objectives, risks, fees and expenses before investing or sending money. The prospectus contains this and other information and can be obtained by clicking here or calling 1 (800) 243-1575. Read the prospectus carefully before you invest or send money.

Selected American Shares’ investment objective is capital growth and income. In the current market environment, we expect that income will be low. There can be no assurance that the Fund will achieve its objective. Selected American Shares invests primarily in equity securities issued by large companies with market capitalizations of at least $10 billion. Some important risks of an investment in the Fund are: market risk: the market value of shares of common stock can change rapidly and unpredictably; company risk: the market value of a common stock varies with the success or failure of the company issuing the stock; financial services risk: investing a significant portion of assets in the financial services sector may cause a fund to be more volatile as securities within the financial services sector are more prone to regulatory action in the financial services industry, more sensitive to interest rate fluctuations, and are the target of increased competition; and foreign country risk: companies operating, incorporated, or principally traded in foreign countries may have more fluctuation as foreign economies may not be as strong or diversified, foreign political systems may not be as stable, and foreign financial reporting standards may not be as rigorous as they are in the United States. As of December 31, 2009, Selected American Shares had approximately 15.5% of assets invested in foreign companies. See the prospectus for a complete listing of the principal risks.

Rolling 5 Year Returns. This presentation includes Selected American Shares rolling 5 year returns. The performance has been computed for the time periods indicated and assumes an investment on January 1 of each year unless otherwise indicated. The figures are based on past performance and are not a guarantee of future results.

Morningstar assigns a stewardship grade to funds it covers. The overall stewardship grade is the sum of the following five components that are graded on a scale of A through F: Regulatory Issues, Board Quality, Manager Incentives, Fees, and Corporate Culture. The overall grade will range from an A to an F. Morningstar utilizes a fund’s public filings, responses to a survey sent out by Morningstar to the fund company and the expertise of the Morningstar analysts to determine a fund grade. The methodology for the Morningstar Stewardship grade is completely different from the performance-based Morningstar star rating and has no impact on the star rating. The grades are subject to change and are as of December 31, 2009.

A bear market is defined as the Dow Jones Industrial Average being down more than 15% from a previous high.

The S&P 500^® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Index is adjusted for dividends, weighted towards stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. Investments cannot be made directly in an index.

Broker-dealers and other financial intermediaries may charge Davis Advisors substantial fees for selling its products and providing continuing support to clients and shareholders. For example, broker-dealers and other financial intermediaries may charge: sales commissions; distribution and service fees; and record-keeping fees. In addition, payments or reimbursements may be requested for: marketing support concerning Davis Advisors’ products; placement on a list of offered products; access to sales meetings, sales representatives and management representatives; and participation in conferences or seminars, sales or training programs for invited registered representatives and other employees, client and investor events and other dealer-sponsored events. Financial advisors should not consider Davis Advisors' payment(s) to a financial intermediary as a basis for recommending Davis Advisors.

Shares of the Selected Funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested.

Davis Distributors, LLC, 2949 East Elvira Road, Suite 101, Tucson, AZ85756, 800-243-1575.

Overview

Investment Strategy

Investment Results

Sixty Years of Investment Experience

Fund Attributes